Debt Provision P&L Question

System
System Posts: 100,534 🤖 Admin 🤖
edited 10:24AM in AAT student discussion
I'm just trying some quick questions from FTC and am stuck with the following;-

At 30 September 2004, G Ltd had a provision for doubtful debts of 25k. During the year to 30 September 2005 the company wrote off bad debts of 15k and at the end of the year it was decided that the provision for doubtful debts should be 18k.

What should be included in the profit and loss account for bad and doubtful debts?

The answer given is 11k but I can't see how despite trying to lay things out with T accounts. Can anyone please help explain?

Comments

  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Debt Provision P&L Question

    not sure of 11k.i think it shud be 8k:
    25-15=10(b/forward)
    and then 18(this yr)-10(b/f)=8
    i think 8 is this yr's increase and it has to go to p&l
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Debt Provision P&L Question

    Thanks for this - I agree it should be 8k. Interestingly the question gave several multiple choice answers - none of which were 8k.
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Debt Provision P&L Question

    Thanks for this - I agree it should be 8k. Interestingly the question gave several multiple choice answers - none of which were 8k.

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